Private schools to lose exemption in non-domestic rates proposals

Most independent schools would lose their charity relief from non-domestic rates, and changes would be made to other forms of relief, under proposals to reform non-domestic rates in Scotland just put out to consultation by ministers.

The plans follow many of the recommendations of the review by Ken Barclay, published in August 2017, which the Government previously announced it was accepting. It has since convened an Implementation Advisory Group to advise on the details of a number of the recommendations. The group's views have informed the present consultation, which covers those reforms that require primary legislation.

Business-related proposals include a "business growth accelerator", introducing a 12 month delay before rates are increased following expansion or improvement of an existing property; three-yearly (rather than five-yearly) revaluations from 2022, with valuations based on market conditions on a date one year prior (rather than two years); and a new discretionary power for councils to apply "modest rates supplements in certain circumstances" from 2020 for out-of-town ratepayers or predominantly online ratepayers, initially under pilot schemes.

There are also proposals for new civil penalties for non-provision of information; bringing the timing of debt recovery into line with that for council tax; and reforms to the appeals system to make it more streamlined and also to enable a valuation to be increased as well as reduced.

On reliefs, most independent schools would lose their charitable status from April 2020, apart from those for children with additional support needs, though exceptional cases such as specialilst music schools will "require further consideration". A similar recommendation covering arms' length external organisations "is being taken forward administratively", but the paper does not mention accommodation provided by universities, which also featured in the Barclay review.

Sports club relief would be reviewed to ensure it applies only to those affordable, community sports clubs for which it was intended; and public parks will become rateable to the extent that the land is used for commercial activity.

Reliefs for empty properties wil be further tightened, to encourage bringing empty property back into economic use.

The Government has already ruled out the Barclay proposal to introduce rates for agricultural property and commercial agricultural processing.

Click here to access the consultation. The deadline for responses is 17 September 2018.